Automotive consumers are often drawn to cars and trucks sporting the latest and greatest technology. This fact, combined with record high gas prices, has helped Toyota (NYSE:TM) achieve significant success with its gas-electric hybrid Prius. Given that the hybrid market reportedly has grown 960% since 2000, it's no wonder that rumors have been swirling that General Motors (NYSE:GM) is in talks with Toyota for a deal on hybrid technology.
DaimlerChrysler (NYSE:DCX) may now be laying the groundwork for its own technology frenzy. The company has been seeing intense interest in its Jeep Liberty diesel models, according to Cars.com. Admittedly, the numbers so far are small. DaimlerChrysler expects to build only 5,000 such trucks this year and has sold just 1,729 since the model's introduction in January. Still, the consumer response has been encouraging. The diesel Liberty sells within 18 days of reaching dealer lots, compared with 40 to 50 days for typical models, and 60,000 consumers have contacted DaimlerChrysler expressing interest in the vehicle.
DaimlerChrysler's timing in introducing diesels in the U.S. may be dead-on. Gas prices remain stubbornly high, and the Jeep Liberty's diesel boasts 27% better fuel economy than comparable gasoline engines. Furthermore, changes in the energy market eventually could make diesel engines much more attractive. Energy companies such as ChevronTexaco (NYSE:CVX) are increasing their investments in gas-to-liquids production. This technology, owned by South African firm Sasol (NYSE:SSL), reportedly converts natural gas into clean fuel that can be burned in current diesel models.
While hybrid technology continues to excite consumers, changes are afoot that could rapidly increase the importance of diesel engines. Right now, DaimlerChrysler is charging $8,000 for the diesel option, even though the fuel cost savings is only about $250 per year assuming 15,000 miles of driving. But if the company can sell to 35% of those 60,000 customers inquiring, that could mean $168 million in incremental sales. So, DaimlerChrysler's small steps to convert American consumers to diesel could generate huge payoffs in the years to come.
Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
